Finance Hearing Statement: Improper Payments in Federal Programs

WASHINGTON – Today, Sen. Tom Carper (D-Del.) released the following statement on the Senate Finance Committee’s hearing on improper payments made by federal government programs.

“Federal improper payments can be an instructive symptom of a serious disease that should concern all of us, namely the misuse or mismanagement of taxpayer dollars. Throughout my time in public office, I’ve focused on ways to improve our stewardship of taxpayer dollars, whether it is reducing errors in federal spending, inefficient spending, or fraudulent spending.  That’s why I am particularly pleased that the Finance Committee is holding a hearing on this important issue, because improper payments can serve as canaries in the coal mine, warning us of potential vulnerabilities in federal financial management.

“As my colleagues know, I like to focus on the root causes of a problem, instead of just treating its symptoms. I believe that approach is particularly important as we review why and how our federal agencies are making improper payments, and I hope my colleagues share my point of view.

“In order to create an effective solution to a problem, we must first thoroughly understand what’s happening. One big misconception about improper payments is that they are always a symptom of fraud. That is simply not the case. Quite often, improper payments are unintentional mistakes. For example, a legitimate payment that is issued for an accurate amount, but does not have adequate supporting documentation, is considered improper. That circumstance should be corrected, but it’s not a scam. An inefficient and inaccurate federal payment system, however, can certainly create a ripe opportunity for bad actors to commit fraud, and Congress has a duty to address these vulnerabilities.

“However, you can’t manage what you can’t measure. That’s why Congress took action to require all executive branch agencies to identify programs that may be susceptible to significant improper payments, and then measure and report any improper payments that occurred. Five years ago, Congress expanded these requirements to help ensure agencies are adequately assessing the risk of improper payments in their programs, and that they have action plans to reduce that risk.

“Last year, when federal executive agencies reported their findings, we saw a significant increase in improper payments. That increase is troubling, but we shouldn’t react without knowing what caused it. Today, I’m most interested in hearing from Government Accountability Office Comptroller Gene Dodaro about what we actually mean when we say a payment is improper – whether it’s an over or under-payment, an act of fraud, or some other error – and if we have a solid grasp on the breakdown between the different scenarios. That information is critical to any effort to correct the mistakes made by our federal payment systems.

“The American people entrust us with their hard-earned money, and they expect that we do everything possible not to waste it. We have a long way to go to make good on this expectation, but I know we are up to the task. I look forward to working with my colleagues on this committee to identify efficient and comprehensive solutions to stop improper payments before they happen.”